Challenges of SMEs Clusterization Strategy for PPP Agriculture Processing Industries in Tanzania

Joseph Magali


The empirical literature indicates that partnership is a key component in fostering Small and Medium Enterprises (SMEs) industrialization. Many scholars also argue that private public partnerships (PPP) may be used to promote the processing and manufacturing of selected export materials. PPP cluster based industrialization strategy when integrated with industrial policy has many advantages such as promotion of financial resources access, catalyzing the research and development and creation of business opportunities. This paper investigates the challenges facing the PPP SMEs agricultural industrialization strategy for oil seed cluster in Babati district in Tanzania. The paper uses the data obtained from the participants of oil seeds cluster workshop and the qualitative content analysis where secondary data regarding PPP cluster strategy are presented and analysed. The study reveals that the major challenges hindering the PPP cluster industrialization for oil seeds cluster are inadequate skills for local SMEs owners, lack of transparency, low active involvement for the PPP participants and lack of binding agreement for SMEs owners. This paper recommends that for effective industrialization under PPP cluster strategy, local SMEs cluster participants and other stakeholders should be involved at every stage in the industrialization process. Training also is essential for promotion of effective industrialization process. More empirical studies should be conducted to analyze other factors limiting the PPP strategies for agro-processing industries clusters in Tanzania.

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